California attorney general requests emergency order to halt sale of 2 hospitals

California Attorney General Xavier Becerra is continuing his efforts to suspend the sale of two hospitals, according to the Gilroy Dispatch.

In early January, Mr. Becerra filed a petition to halt El Segundo, Calif.-based Verity Health's sale of two hospitals to Santa Clara County. Verity filed for bankruptcy in August and is seeking to divest its six hospitals.

On Jan. 30, U.S. Bankruptcy Judge Ernest M. Robles denied Mr. Becerra's request to block the sale. The judge said Mr. Becerra failed to identify a statutory provision that establishes his authority to review a sale when a county government is buying a nonprofit hospital.

A few days after the judge's ruling, Mr. Becerra filed a motion asking the court for an emergency stay of the sale.

He wants to block the deal because he claims Santa Clara County has not agreed to conditions put in place in 2015 when private hedge fund BlueMountain Capital acquired six hospitals owned by Los Altos, Calif.-based Daughters of Charity Health System. The deal and name change to Verity were approved, subject to several conditions, including that O'Connor Hospital and St. Louise Regional operate as acute care hospitals and offer emergency services for 10 years.